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119-hr-6190119th CongressWALLET

Tax Cuts for Veterans Act of 2025

Sponsored By: Representative Hamadeh, Abraham J. [R-AZ-8]

Introduced

Summary

Makes most military retirement pay and related benefits tax-free. It would exclude retired and retainer pay under titles 10 and 14 and many disability or combat-related pensions, annuities, and allowances under titles 10, 14, 37, or 38 from federal gross income.

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  • Veterans and military retirees: Retired or retainer pay paid under title 10 or 14 would be excluded from taxable income, so those payments would not be taxed federally.
  • Disabled service members and survivors: Monthly compensation, pensions, annuities, or allowances tied to disability or combat-related injury or death under titles 10, 14, 37, or 38 would be excluded from gross income.
  • Members of uniformed services other than the Armed Forces: Reductions in retired or retainer pay under chapter 73 would be excluded up to the individual’s “consideration for the contract,” which the bill defines to include pre-1966 reductions and certain deposits under title 10.
  • Legal and timing changes: The bill would repeal section 1403 of title 10, update tax code cross-references, and apply to taxable years beginning after enactment.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 0 costs, 1 mixed.

Tax break for other uniformed retirees

This bill would exclude reductions in retired or retainer pay for uniformed services retirees who are not in the Armed Forces. The exclusion lasts until the total excluded equals your "consideration for the contract." That amount equals reductions before January 1, 1966 plus deposits under sections 1438 or 1452(d) of title 10. Changes would apply to tax years starting after enactment.

Tax-free pay for Armed Forces retirees

This bill would make most retired and disability pay for Armed Forces members tax-free. It would exclude retired and retainer pay under titles 10 and 14. It would also exclude monthly compensation, pensions, annuities, and allowances tied to disability, combat injury, or death. Changes would apply to tax years starting after enactment.

Conforming repeal for military pay

This bill would repeal section 1403 of title 10 as a conforming change. It is a technical change tied to the other tax rules in the bill. Its practical effect on benefits or taxes depends on how the other changes work together. The repeal would apply to tax years starting after enactment.

Sponsors & CoSponsors

Sponsor

Hamadeh, Abraham J. [R-AZ-8]

AZ • R

Cosponsors

  • Rep. Moore, Barry [R-AL-1]

    AL • R

    Sponsored 11/20/2025

  • Rep. Levin, Mike [D-CA-49]

    CA • D

    Sponsored 11/20/2025

  • Rep. Massie, Thomas [R-KY-4]

    KY • R

    Sponsored 11/20/2025

  • Del. King-Hinds, Kimberlyn [R-MP-At Large]

    MP • R

    Sponsored 11/21/2025

  • Rep. Davis, Donald G. [D-NC-1]

    NC • D

    Sponsored 12/2/2025

  • Rescom. Hernández, Pablo Jose [D-PR-At Large]

    PR • D

    Sponsored 12/3/2025

  • Rep. Langworthy, Nicholas A. [R-NY-23]

    NY • R

    Sponsored 3/16/2026

Roll Call Votes

No roll call votes available for this bill.

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